The credit crunch tightened its grip on families last night as two big mortgage lenders raised their rates or withdrew deals, the price of oil hit another record and figures showed that new housebuilding projects are about to fall to their lowest level since the Second World War.

There are growing fears about funding shortages. High street banks, which have been battered by the credit crunch, are asking shareholders for extra cash to plug the gaps caused by losses they suffered as a result of the American sub-prime crisis.

Royal Bank of Scotland, HBOS, Bradford & Bingley and Barclays are all set to offer shareholders added stakes in return for extra cash.

Last night Nationwide Building Society increased its mortgage rates by half a point for the second time in two weeks. Borrowers with a 5 per cent stake in their homes now pay nearly 8 per cent for new deals. Barclays stopped offering two-year fixed-rate home loans — the most popular type of mortgage.

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The lack of ready cash is exacerbating the mortgage drought as banks hang on to their money rather than lend it to their rivals. The rate at which banks lend to each other is almost at a record high.

Average two-year mortgage rates have risen to 6.75 per cent, the highest level since 1998, when the Bank base rate was above 7 per cent. The base rate today is 5 per cent.

There are concerns that the housing downturn will drag down a large corner of the economy with it.

Work will start on 147,700 houses across the UK this year — the fewest since the war ended in 1945 — making it almost impossible for the Government to meet its housing targets, according to the Construction Products Association.

The CBI gave warning of widespread job losses in the construction and retail industries. Workers in bars, restaurants and hotels are also more susceptible to losing their jobs as consumers rein in their spending.

Unemployment rose at the fastest rate in two years in April, when an extra 20,000 people began claiming benefits, and the CBI forecasts that by 2010 nearly 200,000 people will have lost their jobs.

The soaring cost of oil has been blamed for the surge in inflation. The price of a barrel yesterday reached its highest level yet, at nearly $140, as traders brushed aside a decision by Saudi Arabia to start pumping crude at its fastest rate since 1981.

The increase in production comes before an energy summit of producer and consumer countries in Jedda this weekend. Market experts said that the increase was not large enough to have a significant impact on the physical market for oil.

Gordon Brown described the trebling of world oil prices as “the most worrying situation in the world” at the moment. The Prime Minister called for “long-term dialogue” between oil consumers and producers, and said that countries would have to increase nuclear power and renewable energy capacity to reduce the world’s dependence on oil.

Economists fear that the pressure on families could spark demands for wage rises. Tanker drivers are threatening to strike again this week as they demand bigger salaries. A widespread increase in wages could push prices even higher, further stoking inflation.

Economists said that figures being released today were likely to show that inflation rose to 3.1 per cent last month. This will force Mervyn King, the Governor of the Bank of England, to write to the Chancellor to explain why inflation is so far above the 2 per cent target. The CBI expects inflation to hit 3.8 per cent this year.

About 1.5 million people will come to the end of short-term mortgage deals this year and will almost certainly have to pay more. A borrower who does not qualify for a deal with a rival lender will have to pay his or her own lender’s expensive standard variable rate or sign up to a new deal at whatever rate the lender demands.

Aaron Strutt, of Chase de Vere Mortgage Management, an indepedent mortgage broker, said that the market was becoming almost impossible for borrowers to navigate. “Rates are shooting through the roof,” he said. “More and more borrowers are in a position where they cannot switch or take out a new mortgage. Some mortgage deals have vanished completely for the majority of borrowers.”

Mortgage approvals for new borrowers fell by 36 per cent in April, compared with a year earlier, according to the Council of Mortgage Lenders.

Steve Turner, of the House Builders Federation, said that this slide in mortgage lending had hit construction companies severely. “The lack of mortgages is the be-all and the end-all of the problem,” he said. “It’s like the cart before the horse. In the 1990s the economic conditions dragged down the housing market. Now it could be the other way around.”

The Government has pledged to create three million homes in England before 2020, and has promised to increase the number of homes available each year by 240,000 by 2016. But experts say that it will miss these targets as the housing market stalls. About 175,360 houses were completed in England last year, and that figure is expected to fall further.

A spokesman for the Department for Communities and Local Government said that building companies needed to ignore the market conditions and concentrate on the future. “It is essential for housebuilders to base their decisions on longer term trends.”

Caroline Flint, the Housing Minister, recently announced a £200 million fund to renovate empty homes. But Noble Frances, of the Construction Products Association, said it was not enough. “It will fund about 1,500 houses. It doesn’t go very far.”

The share prices of big construction companies have halved over the past week, but yesterday Persimmon, Taylor Wimpey and Barratt all rose slightly after vague talk that institutional investors would pump money into the sector.